Principles and methods of pricing in trade enterprises - Pricing in trade

Principles and methods of pricing in trade enterprises

When pricing policy for trading enterprises is necessary to comply with the following principles:

• Ensuring the alignment of the pricing policy of the enterprise with the overall strategy of trade management and the priority objectives of trade development;

• Ensuring the alignment of the pricing policy of the enterprise with the consumer market conditions and the peculiarities of the chosen market niche;

• Ensure the alignment of the pricing policy of the enterprise with the types of retail outlets. Such parameters of the store type as the form of its commodity specialization, the nature of the placement on the territory of the settlement and the price level of the goods sold have a direct impact on the purposes and possibilities for the formation of the pricing policy of the trading enterprise;

• providing an integrated approach to setting the level of trade mark-up for goods in conjunction with the level of customer shopping;

• Implementation of active pricing policy in the market. Active forms of this policy are determined by such factors as independence of approaches to setting the level of retail prices and trade mark-up on certain groups of goods, etc. The implementation of active pricing policy ensures a clearly expressed price positioning of this trading enterprise in the consumer market;

• Ensuring high dynamism of pricing policy. This dynamism is ensured by the rapid reaction of the developed pricing policy to changes in the internal conditions of the development of the trading enterprise and environmental factors, i.e. timeliness of revision of its separate parameters in coordination with the dynamics of the consumer market, stages of the life cycle of the enterprise, changes in the conditions of management.

The process of forming a pricing policy of a trading enterprise covers the following main steps:

1. The choice of the defining objectives of the pricing policy. Due to the tasks of ensuring the strategic development of the trading enterprise in the forthcoming period, the priority objectives of development of retail turnover and the conditions for carrying out economic activities. With this in mind, the formation of a price policy at the trading enterprises is carried out on the basis of three principal targets :

1) a reference point for buyers;

2) a benchmark for current costs;

3) a benchmark for profit.

2. Evaluation of the current level of trade mark-up. The main purpose of such an assessment is to determine the minimum of its level below which it can not be established based on the requirement of self-repayment of the process of selling goods . In the process of assessing the level of trade mark-up is analyzed:

a) the average level of trade mark-up in the enterprise and its dynamics for individual stages of the pre-planning period;

b) the existing differentiation of the level of individual elements of the trade markup (distribution costs, taxes, profits), and the structure of these elements in the composition of trade markups;

c) the existing differentiation of the level and structure of the trade mark-up in the context of individual groups (subgroups, types) of goods;

d) the possibility of reducing the level of current costs by saving certain types of distribution costs and implementing effective economic activity in the forthcoming period.

3. Evaluation of the consumer market. The main purpose of such an assessment is to study the opportunities differentiation of the price level (and, accordingly, the level of the trade markup) taking into account the purchasing preferences of certain categories of the served population. In the process of assessing the consumer market is analyzed:

1) the possibility of differentiating prices for individual goods in the context of individual categories of customers, taking into account a differentiated level of trade services;

2) the possibility of differentiating prices for individual goods within the established "competitive field" on this segment of the consumer market;

3) the possibility of expanding the volume of sales of certain goods due to a certain reduction in prices for them (and, accordingly, the level of trade mark-up). The increase in the volume of sales of goods can cause an increase in the amount of trade allowances received even if their level is lowered.

4. Differentiation of the objectives of the price policy in terms of commodity groups taking into account the market opportunities and the level of the company's current costs by the following main classification criteria:

1) on the role of goods in meeting the needs. In accordance with this feature, products of everyday (most mass) demand are singled out; goods of periodic demand and goods of occasional demand. For each of these groups, a differentiated pricing policy can be implemented;

2) in terms of product quality and level of merchant services. Both these features are interdependent and are considered comprehensively when differentiating price policy;

3) in the stages of the product life cycle. Different target price targets can be used at different stages of the product life cycle (primarily those subject to fashion and high-tech influences).

5. Choose a model for calculating the level of trade markup for this group (subgroup, type) of goods with a price policy guide:

1) to buyer - the basic element of calculating the level of trade markup is taken to the level of the price of goods, acceptable to the relevant categories of buyers;

2) current costs - the basic element of calculating the level of trade mark-up is the amount of circulation costs per unit of product sales;

3) Profit - the target level of profitability of distribution costs is taken as the basic element of calculating the level of trade markup.

6. Formation of a specific level of the trade markup for goods. Such specification is carried out for each commodity item in accordance with the model chosen for it to calculate the level of trade markup.

7. Formation of a mechanism for timely adjustment of the level of trade markup. Such an adjustment may have the nature of planned and unplanned deviations from the estimated level of the trade mark up or down:

1) the planned reduction of the level of the trade mark-up may be regulated by a system of pre-determined discounts from the retail price of goods provided: for the purchase of a certain quantity of a specific commodity; for a certain total amount of purchases of goods; to regular customers and in other similar cases;

2) the planned increase of the level of trade mark-up can be regulated by a system of predetermined sizes of increase in retail commodity prices: when providing additional trade services; at sale of the goods at night, on holidays and in other similar cases;

3) the unplanned deviation from the estimated level of the trade mark-up may be caused by a change in the market situation; change in rates of taxation of trading activities; change in business conditions and other similar reasons.

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